We wouldn't blame Universal Insurance Holdings, Inc. (NYSE:UVE) shareholders if they were a little worried about the fact that Sean Downes, the Executive Chairman recently netted about US$885k selling shares at an average price of US$44.27. However, that sale only accounted for 1.7% of their holding, so arguably it doesn't say much about their conviction.

Universal Insurance Holdings Insider Transactions Over The Last Year

The CEO & Director, Stephen Donaghy, made the biggest insider sale in the last 12 months. That single transaction was for US$1.7m worth of shares at a price of US$34.07 each. That means that even when the share price was below the current price of US$44.15, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 7.3% of Stephen Donaghy's stake.

In the last year Universal Insurance Holdings insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Universal Insurance Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Universal Insurance Holdings insiders own 9.1% of the company, currently worth about US$111m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Universal Insurance Holdings Tell Us?

Insiders sold Universal Insurance Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Universal Insurance Holdings is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Universal Insurance Holdings.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.